Dave Sharma (NSW, Liberal Party) Share this | Hansard source

We heard Senator Birmingham ask Senator Gallagher earlier about the insolvency rates in Australia being at record highs, and mentioning that when she was questioned about this last week she said, on a number of occasions, 'The facts don't support that.' Well, let's look at the facts. The insolvency rates in Australia right now are 25 per cent higher than they were prior to the pandemic. The rate in October was 5.04 per cent, which means one in 20 businesses are failing. In the construction sector it's higher—5.3 per cent—and in the hospitality sector it's 8.5 per cent. CreditorWatch expects this rate to get worse; it expects business conditions to continue to deteriorate. The chief executive officer of the Council of Small Business Organisations Australia—COSBOA—aid in their 2024 small-business perspectives report said that small businesses are under colossal pressure. But we heard from Senator Gallagher that the facts don't support that.

Small businesses—and the COSBOA report makes this clear—are grappling with increasing costs in energy, increasing costs in rent, increasing costs in insurance, higher interest rates, and complex industrial relations changes. That is a perfect storm putting small businesses under colossal pressure. Let's look at each of those in turn. Electricity prices are up 30 per cent since the election if we ignore the government's one-off rebates. Gas prices are up 30 per cent since the election. Rent is up 16.3 per cent since the election. Insurance is up 17.3 per cent since the election. We've had interest rates increase 12 times by a total of 400 basis points, with no relief in sight. As for complex industrial relations changes, we've had 757 additional pages added to the Fair Work Act since 2022. We've had broken promises, not to reintroduce multi-employer bargaining. We've had great uncertainty for small business introduced in terms of the status of casuals and the meaning of the right to disconnect. It's little wonder with those complex industrial relations systemic changes that labour productivity has declined now by two per cent in the past two years. Businesses are grappling with higher costs of energy, higher costs of rent, higher costs of insurance, higher interest rates and complex industrial relations changes. It's little wonder that they are feeling under so much pressure.

We also have, because of this government's mismanagement of the economy, consumers with much less to spend. Disposable incomes are down 8.7 per cent since the first quarter of 2022. That's worse than any other advanced economy. It's worse than any other OECD economy. In fact, it's the worst since records began. What that means is if you're an average full-time earner on $95,000 a year, you have 150 less per week to spend in disposable income. That means you're spending less on a meal out and less on coffees. It's no wonder that, particularly in the hospitality sector, small businesses are struggling. Small businesses are small in size, but in terms of their scale and importance to the economy, they are massive. They employ more than five million people. They're often started by and run by families and extended family units, and they are the heart of many communities in our towns and suburbs and cities across Australia. So if small business is doing it tough, that's not just a problem for them; it's a problem for all of us. It's a problem for the people who work for small businesses, it's a problem for the people who run the small businesses, it's a problem for their customers who rely on small businesses, and it's fundamentally a problem for the health of the economy.

Rather than saying, 'The facts don't support that,' and denying that there is a problem, denying that there is an issue, denying that electricity prices are higher, denying that gas prices are higher, denying that interest rates are at record highs and denying that rent and insurance are both going up, this government needs to grapple with the scale of the economic challenges facing our nation and to grapple and sympathise with—at least as a very first point of call—the challenges being faced by small businesses in particular, who are, frankly, getting smashed by this government's economic policy. We have seen insolvency rates higher than they have ever been—the highest since records began, in 1999—and their business climate is only growing worse.